Wood Incorporated factored $150,000 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood to record the sale, assuming that the recourse liability has a fair value of $7,500. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Wood Incorporated factored $150,000 of accounts receivable with Engram Factors Inc. on a with recourse basis. Engram assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood to record the sale, assuming that the recourse liability has a fair value of $7,500. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Carla Vista Co. sells $647,600 of receivables with a fair value of $659,400 to Carla Vista Trust in a securitization transaction that meets the criteria for a sale. Carla Vista Co. receives full fair value for the receivables and agrees to continue to service them, estimating that the fair value of this service liability component is $26,930. Prepare the journal entry for Carla Vista Co. to record the sale.
Prudential Company sold 30 air conditioning units, on January 15, 2020; sale price for each unit is P40,000.All of the sales are subject to terms 2/10, n30; the entity used the net method of accounting for accounts receivable.Required;1. prepare journal entry to record the sale.2. prepare the journal entry to record receipt of the payment assuming the correct amount was received on January 25, 2020.3. prepare the journal entry to record receipt of the payment, assuming the correct amount was received on February 10, 2020.
Wood Incorporated factored €150,000 of accounts receivable with Engram Factors Inc., Without guarantee. Engram assesses a 2% finance charge of the amount of accounts receivable Retains an amount equal to 6% of accounts receivable for possible adjustments. Prepare the journal entry for Wood Incorporated and Engram Factors to record the factoring of the accounts receivable to Engram.
Bramble Corp. factors $630,000 of accounts receivable with Marin Inc., Inc. on a with recourse basis. Marin Inc. will collect the receivables. The receivable records are transferred to Marin Inc. on August 15, 2020. Marin Inc. assesses a finance charge of 3.0% of the amount of accounts receivable and also reserves an amount equal to 5.40% of accounts receivable to cover probable adjustments. Bramble prepares financial statements under ASPE. Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2020, for Bramble to record the sale of receivables, assuming the recourse obligation has a fair value of $5,900
The controller for Bramble Corporation has reached an agreement with Sheffield Financing Ltd. to sell a large portion of Bramble's past-due accounts receivable. Bramble agrees to sell $1,820,000 of accounts receivable to Sheffield with recourse. Bramble's controller estimates that the fair value of Bramble's liability to pay Sheffield for uncollectible accounts is $163.000. Sheffield will charge Bramble 9% of the total receivables balance as a financing fee, and will withhold an initial amount of 10% (a) Calculate the net proceeds and the gain or loss on the disposal of receivables to Sheffield Financing Ltd. Net proceeds ✓on disposal of receivables S $
White Corporation has entered into an agreement to transfer accounts receivable to Murphy Company. Under the terms of this agreement, White receives 80% of the value of all the transferred accounts receivable (to reflect credit risk) and is charged a 1% service charge, which is based upon the dollar amount of transferred receivables. Interest is charged at an annual interest rate of 12% of any outstanding loan balance. The transferred receivables will continue to be collected by White with any cash flows being remitted to Murphy at the end of each month. White is not allowed to transfer the receivables to anyone else. White normally transfers its accounts receivable. The following selected 2019 transactions relate to this agreement: Dec 1 Accounts receivable of $160,000 are transferred. 11 A sales return of $1,000 on a transferred account is made. 31 Collections are made on $82,000 of the transferred accounts receivable plus interest for the month of December. This amount is…
ll.
5. Packwood, Inc. factors $250,000 of its accounts receivable to M&B Finance with recourse. M&B charges a fee of 1% and withholds 10% of the face amount of the receivables to cover possible uncollectible accounts and sales returns. The bank deducts the fee from the cash given to Packwood at the outset of the arrangement. Packwood estimates the fair value of the recourse obligation is equal to $6,000. Packwood estimates the fair value of the 10% of the face amount of receivables equals $22,500. Packwood does not retain control over the factored receivables. Prepare any journal entries Packwood, Inc. would make to record the factoring.
Leon Acrobats lent $12,174 to Donaldson, Inc., accepting Donaldson's 2-year, $15,000, zero-interest-bearing note. The implied interest rate is 11%. Prepare Leon's journal entries for the initial transaction, recognition of interest each year, and the collection of $15,000 at maturity. (Round answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To record the initial transations) (To record the recognition of interest in year one) (To recognize the interest in year 2) Debit Credit [] |||||
Sheldon factored $200,000 of accounts receivable with Penny Factors on a with recourse basis. Penny assesses a 5% finance charge. Sheldon estimates the fair value of the recourse obligation to be $1,500. Penny Factors pays Sheldon 90% of the factored receivables. Sheldon estimates that the value of the final 10% of receivables is $16,000. Journalize the sale of the receivables.
Marks Company sold goods to Birch Company totaling $51,830 during 2020. When Birch was unable to meet Marks’normal terms, Marks accepted from Birch a $60,000, 3-year non-interest-bearing note due 1/1/24. (Marks has acceptednotes in the past in settlement of open accounts.)Required:(a) Prepare Marks’ journal entry on 1/1/21 when the note was signed.(b) Prepare a table which shows the amortization of bond discount over the life of the note.(c) What is the 12/31/22 adjusting entry that will be recorded by Marks?(d) What is the purpose of the journal entry at 12/31/22?
The controller for Riverbed Corporation has reached an agreement with Concord Financing Ltd. to sell a large portion of Riverbed's past-due accounts receivable. Riverbed agrees to sell $1,950,000 of accounts receivable to Concord with recourse. Riverbed's controller estimates that the fair value of Riverbed's liability to pay Concord for uncollectible accounts is $177,000. Concord will charge Riverbed 7% of the total receivables balance as a financing fee, and will withhold an initial amount of 8%. (a) - Your answer is partially correct Calculate the net proceeds and the gain or loss on the disposal of receivables to Concord Financing Ltd Net proceeds 1657500 Loss on disposal of receivables $ 233500 i